Peters v. Ballistier ( 1826 )

Putnam J.

delivered the opinion of the Court. This is a contest between the creditors of an insolvent debtor ; the plaintiffs claiming in virtue of an assignment by the debtor himself, and the defendants claiming under a sale of an agent of the debtor.

It is objected for the defendants, that the plaintiffs have proved no title to the outward cargo ; —■ that the indorsement on the bill of lading was made when the vessel and cargo were at home, and possession might then have been taken, but that no possession was ever taken.

If, however, the transfer was not perfected by a delivery before the vessel sailed, it might be made when the vessel was at sea, and the delivery of the bill of lading with the assignment upon it would be valid as between the parties, and against strangers who did not acquire a legal title without notice of the assignment.¹

It has been suggested, that the assignment to the plaintiffs was fraudulent as against creditors. But we do not perceive any facts in the case which warrant the suggestion. There is no reason to doubt that the plaintiffs did make the advances, and that the assignment was intended to operate in the nature of a mortgage for their security.¹ They were accountable to Gordon or his assigns for the surplus.

So that we are brought to the consideration of the title of the defendants. It is admitted that they could not have been informed of the dishonor of their bill, when they threatened to detain the vessel on account of their claim against Gordon. But nevertheless, Gordon was justly indebted to them for advances they had made for him, and we consider them as nonest creditors. They knew that Gordon had failed, and they had a right to use any lawful process for the recovery of their debt.

But these considerations do not touch the authority of the master to dispose of this return cargo. What was the extent of his authority ? He was, by the written orders, to prosecute the voyage according as he should think best for his owner. What voyage was intended ? Unquestionably to the West Indies, to sell his outward cargo and to bring home the proceeds in a return cargo. These instructions, although somewhat general, must be confined to those objects, and would not authorize the master to go into a course of speculation, not with a view to a return cargo, which he might think would ultimately be advantageous to his owner. So Gordon says he understood them ; he thought that the proceeds of the outward cargo were not to be disposed of in the West Indies, but that they would be brought home. He says also, indeed, that if the master had, in the exercise of his best discretion, sold them there, he should have assented to it. He might have done so from various motives ; — from motives of interest, or of compassion, or of friendship. But the question now under consideration is, if the master had authority to bind his owner or his assigns, whether willing or unwilling to ratify the sale.

It appears that on some former voyages Merrill had traded for the account of his owner; that he had sold wine which he had received in part for his outward cargo, for something to be brought home as return cargo ; and it has been contended that he was the general agent, and acting according to his best judgment; that the defendants were ignorant of the instructions which had been given him ; and we are referred to Fenn v. Harrison, 3 T. R. 760, where the authority of factors is much discussed. Harrison had sent F H. to sell a bill of exchange, informing him that he would not indorse it, nor in any way become liable upon it ; but F. H. told the person who bought the bill, that as the number of Harrison’s house was upon the bill, he would be just as much liable as if he had indorsed it. And Lord Kenyon was of op’nion that Harrison was liable in consequence of the unauthorized representation of bis agent; but the other judges, Ashhurst, Butter, and Grose, were clearly of a contrary-opinion, on the ground that F. H. was not a general agent, but commissioned for a particular purpose.

The general agency may be inferred from the great number of instances in which the agent has acted in the manner as in the case under consideration ; and the particular agency is limited to the single transaction.

The original commission in the case at bar was for a particular purpose, namely, to make what is called a West India voyage, according to the master’s best discretion. So long as his means were intended and directed accordingly, the owner would be bound, his instructions being general and the means resorted to being within the scope of his authority ; but if he should depart from the object of the commission, and instead of making the voyage, should undertake other objects not originally contemplated, it should seem clear, that his owner would not be obliged to confirm his act.¹

But we think the letter from Gordon, directing the cargo to be sent to the plaintiffs, should be considered as if the purport of it had been originally stated in the orders, because that letter was in Merrill’s hands before he sold the molasses to the defendants. So far, therefore, as this case concerned the owner and the master, there was a direct violation of orders.

It is said for the defendants, that they knew nothing of the private instructions which Gordon had given to the master, and should therefore not be prejudiced by them. But the defendants did not make any inquiries as to the extent of his authority. They preferred trusting to the general power usually given to masters of vessels, rather than to such power as upon inquiry it might appear that this master had in fact been invested with. They had a right to know the extent of his commission. If they had inquired, and Merrill had shown them the original orders, and the subsequent instructions to send the property to the plaintiffs, it is hardly to be supposed t^lat would have considered a sale to them as within those instructions.¹

But the master swears that the freighting business among the islands was the principal object, and that he of course must have had authority to sell the return cargo, if he could not ship it, and that he could not find any opportunity to ship it. If this verbal understanding should be considered as valid between the owner and master, it is evident that the letter which directed the master to send the property to the plaintiffs, must have been a revocation of the project of freighting. But if there had not been any such revocation, the facts do not warrant the sale upon that basis. It was not made with the intent to employ the vessel in freighting among the islands, but because of the importunity of the defendants, and the difficulty, delay, and expense, which the master feared would take place, if he did not comply with their request to pay their claim against Gordon. Surely Gordon had a right to be consulted upon that matter before his property should be so appropriated. It can hardly be supposed, that the orders to a master to perform a voyage in the best way he can, will constitute him the judge for the owner in regard to claims against him, and the mode of satisfying them.

It is argued, however, that if the master had no authority to pay this debt, the owner must seek his remedy against him, but that the sale is good. However that might have been, if the sale had been made in the usual course of business, it is to be remarked, that this was an extraordinary transaction, and calling for a full and particular authority, and not a com mon transaction, like, for example, the sale of the outward cargo, which would be within the general scope of the commission given to the master.

If Gordon had not transferred this property to the plaintiffs, he might have ratified this conduct of his master ; but the plaintiffs may insist upon their legal rights, as his assignees, and if he would not have been bound, the assignees are not to be bound. *

Some reliance is placed by the counsel for the defendants, on the fact, that in former voyages Merrill traded according to his discretion for the account of his owner, selling some merchandise he had bought with his outward cargoes foi other goods, and that his instructions on this voyage were similar to those given on former voyages, and that his conduct was approved ; — so that there was a practical construction of his authority as extending to the sale of such part of his return cargoes as he should think for his owner’s interest. But this trading in the other voyages was with a view ultimately to a return cargo. He had never in any former voyage disposed of his return cargo abroad, but had brought or sent it home.

This case has none of the hard features of the case of M'Combie v. Davies, 6 East, 540, where the plaintiff recovered for the tobacco which a broker bought in his own name for the plaintiff, but pledged it to the defendant, who supposed it to be the property of the broker. In the case at bar, the defendants trusted to the personal responsibility of Gordon, not to this property. But the plaintiffs relied originally upon this cargo for their security, and procured insurance to be made upon it immediately after the vessel sailed.

It has been argued, tnat the sale to the defendants has been ratified by Gordon, and by the plaintiffs also. But we do not perceive any thing in the language or conduct of either, which could amount to a ratification. Gordon swears that, on the contrary, he expressed his dissatisfaction to Merrill in pretty strong terms.¹

In regard to the supposed ratification of the plaintiffs, it is contended that they have received the benefit of the 2000 dollars paid by the defendants in cash, and that in their letter to the defendants they claim only a balance, to wit, the money paid for the debt of Gordon ; and that they sued the defendants in assumpsit for the balance, and so have confirmed the sale, and chosen to look to the defendants merely for part of the proceeds.

It is true, that the adopting of the acts of an agent in part, !'s to be considered as the ratification of them in the whole.

As in Wilson v. Poulter, Str. 859, where the assignees of a bankrupt seized a number of South-sea and India bonds, which his agent had bought after his bankruptcy, and brought an action against the agent for the money with which others were purchased ; and it was held, that the accepting of some of the bonds was an affirmance of the act of the agent in laying out the money for them. See the cases upon this point cited in Paley, pt, 1, § 2. But in the case at bar, the money appropriated towards the disbursements of the vessels of the plaintiffs, was applied to their use without their knowledge. If they had received the money of Merrill and had so applied it, the case would have been quite different from the present But they had no election in the matter. The money was paid without their consent, and all that could be required of them would be to account for what had been so expended, upon recovering the value of their property wrongfully delivered to the defendants.

And in regard to their letter, it seems to us to be consisten with these views. It is dated December 4th, 1822. It complains of Merrill’s having paid to the defendants 2139 dollars 49 cents, part of the proceeds of the cargo of the Enterprise, which cargo belonged to the plaintiffs ; and they say that sum was paid wrongfully, and claim to have it repaid. Now it seems to us, that it would be a harsh construction of this letter, to consider it as a ratification of the sale of the property by Merrill. It appears rather to mean, that they were willing to make no further claim for damages than for that balance, as they had received the benefit of the disbursements. But this proposal was rejected, and the parties resorted to their legal rignts.

And in regard to the action which the plaintiffs sued against the defendants in assumpsit for the proceeds — if it had been relied upon, it would háve been a ratification of the sale. The case cited of Smith v. Hodson, 4 T. R. 216, is strongly to that point. But the plaintiffs discovered before trial, that they had misconceived their remedy, and they discontinued their suit. We cannot think that these facts, separately or collectively, amount to a ratification of the sale.

The opinion of all the Court is, that the plaintiffs shall recover. But the action is to stand continued for judgment, to enable the defendants to obtain their judgment against the plaintiffs for the money which has been paid for their benefit upon a contract which has failed, unless the plaintiffs shall allow that sum on account of this verdict.

Note. The plaintiffs accordingly agreed to allow it, with interest from the time when it was paid by the defendants.

1 See Parsons v. Dickinson, 11 Pick. 352; Ingraham v. Wheeler, 6 Connect. R. 284, 15 Mass. R. (Rand's ed.) 533, n. (6).

1 See Parks v. Hall, 2 Pick. (2nd ed.) 206, and notes to that case; Gordon v. Mass. F. & M. Ins. Co. 2 Pick. 249.

1 See Thompson v. Stewart, 3 Connect. R. 171; Parsons v. Armor, 3 Peters, 428; Rossiter v. Rossiter, 8 Wendell, 494; Brydon v. Taylor, 2 Harr. & Johns. 396

1 See Schimmelpennick v. Bayard, 1 Peters, 290.

1 A principal, who neglects promptly to disavow an act of his agent who has transcended his authority, makes the act his own. Bredin v. Dubarry, 4 Serg. & Rawle, 27. See Richmond Man. Co. v. Starks, 4 Mason, 296.

Implied ratifications, however, extend only to such acts of the agent as are known to the principal at the time. Thorndike v. Godfrey, 3 Greenl. 429.